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B U L L E T I N

FA C I L I TAT I O N O F T R A N S P O R T A N D T R A D E I N L AT I N A M E R I C A A N D T H E C A R I B B E A N

Measures to improve This paper provides an overview of several

parameters that would improve the fuel
efficiency of shipping. Calculations are carried

energy efficiency out from a Latin American perspective, and

illustrate the emissions to air and the fuel
consumed by different transport modes.

in shipping One of the conclusions is that initiatives and

incentives to improve energy efficiency in
the shipping sector are few and far between
in the region and that Latin America and the
B a c k g ro u nd Caribbean lags behind other regions.
This FAL bulletin was written by Erik Fridell,
Hulda Winnes and Linda Styhre of IVL Swedish
The transport sector is under considerable pressure to increase fuel Environmental Research Institute.
efficiency. While CO2 emissions are falling in many other sectors, transport The views expressed in this document are those
emissions are expected to rise in the future. Shipping currently accounts of the authors and do not necessarily reflect the
for about 3% of global anthropogenic CO2 emissions, but its share is views of the Organization. For more information,
expected to grow as a result of increased transportation, in combination please contact trans@cepal.org
with difficulties in implementing effective fuel efficiency measures and
replacing fossil fuels. I. Ship design for energy efficiency
In Latin America and the Caribbean, maritime transport is responsible for
II. Alternative fuels
over 90% of all international freight movements in volume terms and is
thus the most important facilitator of the regions participation in the global
III. Operational measures
market (Wilmsmeier and Hesse, 2011). The sector, and more specifically its
energy efficiency, has received little attention from governments in Latin
IV. Effects and barriers
America and the Caribbean. However, the region is striving to become more
competitive in international trade and this, together with the increasing
V. Shoreside electricity
cost of marine fuels, has put pressure on the industry to become more fuel
efficient. As fuel efficiency is inextricably linked to air emissions, measures VI. Modal comparison
and policies that successfully improve energy efficiency will have positive
implications for the regions emission levels. VII. Policies and incentives
Research has already been carried out in the field of alternative
power sources and into technical, operational and structural energy VIII. Conclusions
saving measures for shipping. However, gaps remain between current
knowledge and the implementation of energy efficiency measures by IX. References
shipping companies (Styhre and Winnes, 2013). As in many industries,
a number of measures that would improve fuel efficiency in shipping
have yet to be implemented despite known cost efficiency. This situation
is known as an energy efficiency gap. There is also an extensive list of
barriers that explain the non-adoption of measures. Sorrell and others
(2004) summarized these barriers as risk, imperfect information, hidden
costs, access to capital, split incentives and bounded rationality.

INFRASTRUCTURE SERVICES UNIT

Natural Resources and Infrastructure Division, UNECLAC
 w w w. c e p a l . o r g / t r a n s p o r t e
Thanks to initiatives within the International Maritime
Organization (IMO), a new chapter was added to MARPOL
Annex VI 1 on the prevention of CO2 emissions, which
entered into force on 1 January 2013. An energy efficiency
design index (EEDI) value, which relates the mass of CO2
emissions per transport work to ship size, must be produced
for all new ships. The EEDI of a specific ship is compared
to a reference line that dictates the maximum allowable
limit. The reference line varies by ship type. A ship energy
efficiency management plan (SEEMP) is also required. A
SEEMP should function as an operational tool to improve
energy efficiency. Goods volumes transported at sea are,
however, predicted to rise, and absolute reductions in fuel
consumption and CO2 emissions from the industry are not
expected despite the new regulations (Bazari and Longva,
2011; Anderson and Bows, 2012).
In addition to efforts to reduce fuel consumption and
CO2 emissions from shipping, regulations covering other
pollutants are being implemented, which also have cost
implications. Emissions of sulphur dioxide (SO2) and
particulate matter (PM) are regulated according to the
sulphur content of the fuel. There is a direct correlation
between SO2 emissions and sulphur content, and a
connection between PM emissions and sulphur content has
also been established. These regulations are intended to
address problems with acidification (SO2) and health risks
(PM). However, explicit PM regulations, as apply to other
diesel engines, may be needed in the future to further
mitigate the health risks associated with ship exhausts. The
sulphur regulations mean that the maximum permissible
sulphur content of fuel will be 0.5% from 2020, down
from 3.5% today, and further, in special areas (Sulphur
Emission Control Areas SECAs) the limit will be 0.1%
from 2015. Today, these areas comprise the North and
Baltic Seas, the English Channel and coastal waters around
the United States and Canada. The other pollutant that
is regulated is nitrogen oxides, NOX, and emissions limits
have been somewhat tightened for engines installed after
2011. A further restriction will be implemented at some
point during the period 2016-2021, but only for special
2 NOX emission control areas, currently only coastal waters
around the United States and Canada.
This paper contains an overview of important parameters
to consider in order to improve the fuel efficiency of
shipping. In addition, emissions are discussed and are
compared with other transport modes.
I. Ship design for energy efficiency
Technical measures that reduce fuel consumption in a
cost-efficient way have resulted in highly efficient marine
engines and power trains, optimized flow profiles around
INFRASTRUCTURE SERVICES UNIT
Natural Resources and Infrastructure Division, UNECLAC
hull, rudder and propeller, and innovations such as the
bulbous bow. Still, it is not unusual for individual ships
to consume up to 30% more fuel than necessary due to
imperfect design, badly used propulsive arrangements, or
a poorly maintained hull and propeller. High expectations
of improved energy performance from technical
improvements are also found in a report for the Marine
Environment Protection Committee of IMO, which
estimates that design measures could potentially reduce
CO2 emissions by 10% to 50% per transport work.
Knowledge of the fuel-saving potential of technical
measures related to hull and propeller geometry, hull
construction, propulsion machinery, auxiliary machinery
and equipment, heat recovery, cargo handling, and
alternative energy sources is, in general, good within the
industry. There is a long tradition of development and
research in these areas and the improvement potential is
estimated to be, on average, a few per cent of fuel savings
in each category. A remaining challenge is to increase
knowledge of how the different technical systems on a
ship affect one other. Such knowledge is needed in order
to enhance waste heat recovery or efficiently reduce the
use of electricity on board, which are highly effective
measures for overall energy economy.
Ships have long lifetimes and modifications and retrofits to
existing ships are more expensive than new designs, from
a life-cycle perspective. The ship design process begins
with a mission analysis that outlines factors such as the
types of goods to be transported, how they will be loaded
and unloaded, the routes and the service time. Based on
these requirements, the conceptual design phase starts,
the dimensions and layout of the ship are determined and
powering needs are decided. The conceptual design phase
consists mainly of technical feasibility studies in order to
decide whether the mission requirements can be translated
into reasonable technical parameters and still produce a
seaworthy ship. This is followed by an increasingly detailed
design and refined ship characteristics.
Energy efficiency decisions are to a large extent already
included in the conceptual phases of the ship design
process. Among the most important parameters for ship
energy efficiency are the main dimensions of the ship:
length, breadth, depth and displacement. Small changes
in these parameters can result in big changes in energy
need. The operational phase is by far the most demanding
period of a ships life cycle in energy terms. A well
defined operational profile from the early design stages
is a promising way to develop an energy efficient ship of
high quality. Designing for operations should therefore
also be prioritized over a less costly construction at the
yard from an energy efficiency perspective. Optimization
efforts can be counteracted by the yards requirements for
a cost-efficient construction. Yards do not necessarily take
a life-cycle approach and are not always able to change an
existing design, or the changes may be very costly for the
owner. The ship owner is unlikely to have the skill or the
power to plan for life-cycle costs under such conditions.
Fuel prices have long maintained an upward trend and
fuels share of the total cost has increased. Furthermore,
environmental regulations that demand the use of low-
sulphur fuels will result in even higher fuel costs for ship
operators, and markedly so for operators active in the
Emission Control Areas where requirements are strictest.
As fuel prices rise, interest in energy saving measures
within the industry grows. The ships constructed today
are likely to sail the oceans into the 2040s and during the
lifetime of these ships energy-efficient solutions will most
likely be more valuable than ever before.
II. Alternative fuels
There are a few liquid fuels that could replace oil for ship
propulsion and these are in various stages of development
from pilot project to commercial implementation.
Liquefied natural gas (LNG) could potentially replace oil
in a large share of the fleet. LNG has previously been
used as a fuel for LNG carriers but it is being introduced
in other segments of the fleet. Natural gas is a fossil fuel
and will, like traditional fuel oil, contribute to increasing
CO2 levels in the atmosphere. However, lower emissions
of sulphur dioxide and nitrogen oxides also make
LNG an option for ships in the emission control areas
where marine gasoil is the only other fuel alternative
available today unless abatement technology is installed.
Furthermore, natural gas reserves are expected to last
longer than oil reserves (EIA, 2009). Two issues that are
likely to hold back LNG use are the costly engine retrofits
for existing ships, which make LNG an option primarily
for new builds, and the additional space requirements
for LNG storage. LNG is stored in specially designed
pressurized tanks on board and requires approximately
2.5 to 4 times more storage space than conventional fuel
oils. The lack of infrastructure for LNG in many ports is
also an obstacle.
Once a ship has been constructed for operations on LNG,
the use of liquefied biogas becomes an option. Biogas
and natural gas are made up of the same hydrocarbon
molecules (mainly methane) and are only different in
the sense that they are of different origin; natural gas
is a non-renewable resource from the earths crust while
biogas is from renewable sources, typically produced by
the fermentation of biomaterial such as food and sewage.
LNG can be combusted in dual-fuel diesel engines, where
a small amount of diesel oil is injected simultaneously
with the gas. LNG can also be used as the only fuel in
Otto engines, similar to methanol engines another fuel
discussed for marine use.
Methanol is an alcohol that potentially could be a bridge to a
fossil-fuel-free future, although today it is mainly produced
with natural gas as feedstock. Methanol is a liquid at room
temperature and does not require pressurized tanks. The
use of methanol as marine fuel is at a trial stage. Another
option is synthetic diesel, which can be produced by the
Fischer-Tropsch method or similar processes from basically
any hydrocarbon raw material: natural gas, biogas, coal or
biomass. Synthetic diesel is, however, not yet beneficial to
use from either an energy efficiency or cost point of view
(Bengtsson and others, 2011). Another fuel that can be
used directly in diesel engines is dimethyl ether (DME).
The Marine Environment Protection Committee of IMO
forecasts that heavy fuel oil (HFO) will be completely
replaced by distillate oils and LNG by 2020. In a scenario
analysis, it is assumed that 5% of tank ships and 5%-10%
of coastal shipping will be fuelled by LNG by 2020 and that
these figures will rise to 10%-20% for tankers and 25%-
50% for coastal shipping by 2050. In 2050, only minor shares
of synthetic diesel are expected to have been introduced to
the marine fuel market (Buhaug and others, 2009).
III. Operational measures
A wide variety of measures are needed to achieve
successful and sustainable reductions in the amount of fuel
used per tonne of goods transported between ports of
origin and destination. Logistic measures, including slow-
speed operations, higher capacity utilization, and route
planning are important, as are communication measures
for improved port call efficiencies and changed behaviour,
for example renewed incentive structures within and
between organizations. Communication and behavioural
aspects are important for successful implementation of all
measures, particularly during operations.
The operational energy efficiency measure with the
most potential is slow steaming (Buhaug and others,
3
2009). As the relationship between ship speed and fuel
consumption per unit time is approximately cubical, a
minor speed reduction can have a considerable impact on
fuel consumption. Slow steaming is an attractive option in
times of economic recession with an overcapacity of ships,
but the effects of slow steaming cannot be expected to be
equally significant as the economy recovers and shipping
services are more in demand (Lindstad and others, 2011).
Suggestions for maintaining slow-speed operations in the
international fleet in order to reduce CO2 emissions from
ships include fuel taxes (Cariou, 2011; Corbett and others,
2009) and regulated speed restrictions for ships (Faber
and others, 2012; Lindstad and others, 2011).
 w w w. c e p a l . o r g / t r a n s p o r t e
Another measure that would increase ships energy
efficiency is to improve port efficiency, as this would
reduce vessels turnaround time in port. With a
shorter time in port, the speed at sea can be reduced
while preserving the transport service. Johnson and
Styhre (2013) investigated the possibilities of reducing
speed at sea for short sea bulk shipping by decreasing
unproductive waiting time in port. The results show that
the two largest sources of unproductive time in port
are waiting time at berth when the port is closed, and
waiting time at berth due to early arrival. With one to
four hours of decreased time per port call, the potential
for increased energy efficiency was 2%-8%.
When discussing ship energy efficiency measures it is
important to stress the different premises for liner shipping
and tramp shipping. Liner shipping provides regular
services between specified ports according to timetables
and usually carries cargo for a number of cargo owners,
while tramp shipping is irregular in time and space. Ships
in liner traffic have in many cases been subject to careful
logistic arrangements, including long-term cooperation
with a limited number of ports and fixed timetables
and designated berths. Ships in tramp traffic will seldom
have dedicated berths and port slots and will most often
visit several different ports, all of which have specific
procedures and administration relating to a port call.
Different ship types have different energy needs. A
relevant example for the Latin American market is the
transport of reefer cargo. Reefer cargo, transported in
specialized reefer vessels or in refrigerated containers,
demands extra energy for cooling. About 20% of the
energy needed to transport food in refrigerated containers
is used for refrigeration. Low freight rates have hit reefer
companies hard as container ship operators have filled
idle capacity in their ships by loading containerized reefer
cargo. The ongoing cargo shift from specialized reefer
vessels to container ships is likely to continue; there are no
specialized reefer vessels on order and new-build container
ships are increasing their capacity for refrigerated cargo.
4 of clauses that in different ways include the voyage, the
IV. Effects and barriers
A number of energy efficiency measures in shipping are
also cost efficient. Eide and others (2011) estimate that
approximately 400 million tonnes of CO2 emissions could
feasibly be prevented by only using cost-efficient measures
until 2030. Over the past several years, marginal abatement
cost curves (MACCs) have been used to determine the cost
efficiency of measures. However, published MACCs project
different abatement potential, which is largely explained
by the fact that they use different emission baselines,
different sets of measures and different assumptions
INFRASTRUCTURE SERVICES UNIT
Natural Resources and Infrastructure Division, UNECLAC
about future fuel prices (Faber and others, 2011a). The
fuel prices used by Eide and others (2011) were US$ 350/tonne
for heavy fuel oil and US$ 500/tonne for marine distillate.
With higher prices (the price today for marine distillates
is over US$ 600/tonne), it is obviously possible to reduce
CO2 emissions even further while simultaneously reducing
costs. MACCs are very sensitive to assumptions such as
discount rates, investment costs, vessel service life and
annual transport work (Kesicki and Ekins, 2012). The
analysis of measures includes highly aggregated data
on efficiency and costs, and does not include important
aspects such as revenues that can be expected from speed
increases. Also, the MACC analysis does not take into
account all the perceived costs that a ship owner and a ship
operator associate with a certain technology. Perceived
risks associated with new technologies, which can be
referred to as technological risks, are highly important
reasons for low implementation rates. Other barriers to
implementation are found to be of an institutional or
financial nature (Faber and others, 2009).
Institutional barriers inherent in organizations made
up of shipping industry stakeholders influence the
implementation of fuel-saving measures. Measures
that overcome institutional barriers are believed to
have significant potential to reduce emissions, but
are generally hard to develop and implement (Eide
and others, 2011). Typically, two or more shipping
counterparts have to work together to implement these
measures and increase efficiency. As already pointed
out, tramp shipping is in a more extreme situation than
liner shipping with regard to these issues because these
ships are subject to agreements between ship operators
and charterers which may limit the implementation of
technical and logistic measures (Faber and others, 2009).
For example, the contract between a ship charterer and
a ship operator in tramp shipping will stipulate who
pays for the fuel at different times during the ships
journey. Special contracts, or charter parties, are used,
which state the conditions for use of a vessel during the
chartering period. These agreements contain a number
cargo to be transported and the time frame. There are
also clauses on performance and guarantees for speed
and bunker consumption and regulations regarding
delays. Such clauses can affect energy efficiency since
they provide incentives to save fuel to varying degrees.
In a voyage charter party agreement, there may even be
an incentive for the crew or ship owner to sail at high
speed since the charterer pays rent for the ship in port,
or demurrage.1During an economic recession, the cost of
demurrage may be even higher than freight earnings for
1
Demurrage refers to the period when the charterer remains in possession of the
vessel after the period normally allowed to load and unload cargo (laytime).
ship operators. Thus, a voyage with demurrage may be a
more attractive option for the individual operator than
sailing at a reduced speed and saving bunker.
In general, ships also have a second-hand value that does
not reflect investments in energy efficient equipment.
Faber and others (2011b) refer to low second-hand values,
and prices to charter a ship that do not reflect the ships
energy efficiency, as highly important institutional barriers
to the implementation of energy efficiency measures in
the shipping industry.
Furthermore, an important factor that affects the ability
to implement energy efficiency measures concerns
transaction costs and the difficulties of allocating costs
and profits among different companies for an investment
that benefits multiple stakeholders (Kesicki and Strachan,
2011). Consequently, there is an additional, non-negligible
cost associated with the measures, which can mean that
capital is not allocated to the business where it is most
needed. Smith (2012) points out that low charter prices and
high fuel prices are effective drivers of energy efficiency
efforts among shipping companies. This partly explains
ship operators increased interest in energy efficiency in
shipping recently.
V. Shoreside electricity
The time a ship spends in port is usually considered as
insignificant when it comes to its total fuel consumption.
However, emissions of pollutants, as well as noise, can
be significant problems for the city where the port is
located, and these emissions potentially affect a larger
number of people compared with emissions at sea. There
are some specific measures that can be applied in ports
and it is also possible to influence a ships performance by
differentiating the port fees.
The fuel consumed by ships at berth is mostly used to
produce electricity in order to run facilities on board for
passengers and crew such as air conditioning, cooking and
lighting, and also for pumps to load and unload cargo
on tanker ships. This means that ferries, cruise ships and
tankers use relatively more fuel at berth compared with
other ship types.
One alternative is for ships to use shoreside electricity
at berth. So far, this technology is not widely used but
a number of ports have the facilities and ships in the
liner trade connect to shoreside electricity. A number
of practical issues have hampered development, such as
variations in the voltage and frequency of the electrical
current, investment costs, and crew availability to make
the actual connection. Furthermore, until a few years
ago low bunker fuel prices made it possible to produce
electricity on board at a low cost.
Whether shoreside electricity is a good option for
reducing CO2 emissions or not depends entirely on how
the electricity is produced: coal-powered electricity may
increase CO2 emissions, while they will be significantly
reduced with hydro- or wind-power. The main advantage
of shoreside electricity is, however, that it reduces the
emission of pollutants such as particles and NOX in
populated areas.
VI. Modal comparison
Shipping has, in general, been able to maintain its image of
an environmentally friendly mode of transportation. In some
respects this is accurate: shipping is in most cases relatively
fuel efficient; it can ease problems with road congestion;
it uses relatively little land; and there are relatively few
accidents. However, there are also significant problems:
high emissions to air of noxious substances such as NOX, SO2
and PM in addition to polycyclic aromatic compounds and
other toxic organic substances; emissions to water of oil and
toxic hull paints; and the introduction of alien species into
sensitive environments in ballast water discharge.
In order to illustrate the different emissions to air of CO2,
NOX, SO2 and PM of different transport modes, as well as
the fuel consumed, some sample calculations have been
carried out. It should be noted that other important issues
will of course vary between the transport modes, such as
impact on water, congestion, accidents and infrastructure.
However, problems with emissions of climate gases and air
pollutants are major issues for the transport sector.
The calculations are carried out from a South American
perspective for transporting 1000 tonnes of cargo between
Manaus, Brazil and either Buenos Aires, Argentina
or Santos, Brazil. For shipping this means that the
international rules apply, that is, a maximum fuel sulphur
content of 3.5% and, for ships constructed after 2000, tier
1 NOX levels. It is assumed that the fuel sulphur content is
2.7%. Two ships are studied: a container ship of 10,000 dwt 5
and a bulk ship of 60,000 dwt. Train2 emissions are for the
most part unregulated in South America. It is assumed that
the train is pulled by a diesel engine with emissions typical
for unregulated large diesel engines. Truck regulations in
South America vary from country to country, but generally
newer trucks follow, approximately, the Euro III emission
standard. The sulphur limits for diesel fuel used by train
engines and trucks also vary across the continent. A diesel
fuel with 500 ppm S, which may be regarded as a common
quality, was chosen for the calculations.
2
There does not seem to be good train coverage for these hauls but the train is
included in order to illustrate its potential.
 w w w. c e p a l . o r g / t r a n s p o r t e
Of great importance for the results is the capacity utilization,
or the load factor. It is assumed that the truck, the train and
the container ship carry containers that are filled to 75% of
the maximum weight capacity. In addition, the ships and
the train are assumed to have load factors of 75% when it
comes to the number of containers that are loaded.
The results may be seen in Figure 1. One can
immediately see the difference between the two ships,
as the emissions are much lower for the bulk ship. This
Figure 1
Results from emission calculations for transporting 1000 tonnes of goods
using different vessels and vehicles
A. Manaus to Buenos Aires
SO2
kg
PM
kg
NOx
100 kg
CO2
tonne
FC
tonne
0 100 200 300 400
Container ship
Source: Prepared by the authors.
6 Note: The SO2 value for the container ship is off the scale.
It should be noted that these results are merely examples.
The picture changes on choosing other types of vessels,
as these would be of a different size and have different
exhaust abatement equipment.
Figure 2 illustrates how emissions would be lower if
the ships were to use marine gasoil with 0.1% sulphur
rather than heavy fuel oil and comply with the tier
INFRASTRUCTURE SERVICES UNIT
Natural Resources and Infrastructure Division, UNECLAC
is due to its larger size, but also to bulk ships being
more efficient thanks to lower speed and the fact that
a higher fraction of the deadweight is cargo compared
with a container ship. Fuel efficiency is highest for
bulk ship transportation and lowest for the truck. The
train has relatively high fuel efficiency and is clearly
more efficient than the container ship. CO2 emissions
are directly proportional to fuel efficiency in these
examples, the reason being that the assumed fuels have
similar CO2 emissions related to the energy content in
the fuels. NOX emissions are highest for the container
ship. This is related to the low degree of abatement
normally found for ships. The train is also responsible
for relatively high NOX emissions, since train diesel
engines are normally unabated. For PM, emissions are
similar among the various alternatives in this example
except for the container ship, which has much higher
emissions. The ships have high SO2 emissions because of
the high sulphur content of marine fuel.
B. Manaus to Santos
4 390,953 3 429,735
SO2
kg
PM
kg
NOx
100 kg
CO2
tonne
FC
tonne
500 0 100 200 300 400 500
Bulk ship Train Truck
3 NOX regulations, and if the truck were to meet the
Euro V emission standard and use diesel with 10 ppm
sulphur. Note that fuel efficiency and thus CO2 emissions
are unaffected by these measures. NOX emissions are
significantly lower for both vessels and for the truck, as
are PM emissions. SO2 emissions are drastically reduced
due to lower fuel sulphur content.
 Figure 2
Results from emission calculations for transporting 1000 tonnes of goods using different vessels
and vehicles with enhanced emission cleaning and low-sulphur fuels
A. Manaus to Buenos Aires
SO 2
kg
PM
kg
NOx
100 kg
CO 2
tonne
FC
tonne
0 50 100 150 200 250 300
Container ship
Source: Prepared by the authors.
VII. Policies and incentives
Efforts to improve conditions for nature and man have
appeared on the political agenda for decades. Environmental
sustainability is discussed at the local, regional and global
level with a view to improving living conditions for present
and future generations. Since the industrial revolution, fossil
fuel combustion has caused a net increase in atmospheric
CO2 content that impacts our climate. Air pollution by
ozone, NOX, SO2 and particles has a more direct impact on
human health and is mainly of local and regional concern.
International agreements and conventions such as the Kyoto
Protocol to the United Nations Framework Convention
on Climate Change and the Convention on Long-range
Transboundary Air Pollution (CLRTAP) have been established
following cooperation between several nations. These
forums however, do not include shipping and environmental
regulations on air pollution from international shipping
originating from IMO conventions.
As discussed in this paper, several technical and
operational measures could be taken to achieve greater
fuel efficiency in shipping. In order to reduce the sectors
fuel consumption and CO2 emissions, or at least to curb
the increase, it is not only important that these measures
be applied; there also needs to be further technical
development and new business models that place fuel
efficiency high on the agenda.
Another way to increase the fuel efficiency of transportation
is to transfer shipments to sea from other modes. However,
as is obvious from the data in Figure 1, this may come at
the expense of increased emissions of noxious substances
such as particles and nitrogen oxides. It thus seems
essential that a modal shift toward sea transportation be
B. Manaus to Santos
SO 2
kg
PM
kg
NO x
100 kg
CO 2
tonne
FC
tonne
0 50 100 150 200 250
Bulk ship Truck
accompanied by measures for reducing emissions to air
from ships. This can be accomplished through technical
measures such as low-sulphur fuel and exhaust abatement
technologies. However, since these measures come with a
cost, a prerequisite for their introduction is that suitable
policy measures be introduced.
There are a number of policy options for increasing fuel
efficiency and/or lowering noxious gas emissions. As
increased fuel efficiency and reduced CO2 emissions go
hand in hand, these are largely motivated by the need to
limit impact on the climate. At present only a few such
policy measures are in place. The regulations mentioned
earlier that were decided on by IMO regarding EEDI
and SEEMP are the only notable examples. The EEDI
regulations will put pressure on ship design to become
more fuel efficient in the future and the SEEMP will
hopefully highlight operational measures for better fuel
efficiency. However, in view of the expected increase in
trade, total fuel consumption by the shipping industry
is still predicted to increase in the future. Discussions 7
are also under way in Europe regarding the possibility
of including shipping in an existing system with carbon
credit trading for land-based sources. The first step is to
monitor fuel consumption in European trade. Similar
systems have already been decided upon for aviation.
Another idea is an international levy on CO2 emissions
whereby the funds collected are used to invest in
technology that mitigates CO2 emissions from shipping
or from other sectors.
Some ports have differentiated port fees using CO2
emissions as one of the parameters (for a discussion
 w w w. c e p a l . o r g / t r a n s p o r t e
of differentiation of port dues see Wilmsmeier, 2012).
Some procurement initiatives also take CO2 emissions
into account. Organizations offer information on ships
environmental performance to cargo owners who then
can factor environmental performance into procurement.
One inherent difficulty is how to measure fuel efficiency.
In order to take operational measures into account,
fuel efficiency is often expressed as fuel consumed per
transport work performed in tonne-km. This measure
will vary according to the type of ship and it requires a
transparent bookkeeping system recording cargo, distances
and fuel consumed, much of which is often regarded as
confidential business information. Unfortunately the most
straightforward policy option for stimulating progress
towards greater fuel efficiency, that is, a fuel tax or levy,
seems difficult to implement in the current international
climate. Furthermore, national or local taxes are more or
less totally precluded by international laws governing
international shipping.
For noxious gas emissions, the policy situation is somewhat
more flexible. Clearly, as can be seen from comparing
the results in Figures 1 and 2, significant reductions in
emissions can be achieved by using low-sulphur fuel and
abatement equipment. Regarding the sulphur content
in marine fuel, the decisions taken by IMO will result in
significantly reduced SO2 emissions during the period
2015-2020. This will also result in significantly reduced
emissions of particulate matter.
There are also regulations at hand for NOX, but only tier
3 regulations will result in any significant reduction of
emissions. However, these will be applied in just a few
regions of the world and, since they only apply to new
engines, they only have an impact on emissions when old
ships are replaced by new ones. All of this indicates that
if a significant reduction in NOX emissions from shipping
is sought and there are many environmental and health
risk reasons to do so other policy instruments are needed
to complement the IMO regulations.
One example is the NOX tax that has been used in
8 Norway for a few years. Ship emissions were included
in the national NOX tax system in order to achieve the
Norwegian NOX emission goals, which were determined
on the basis of an international agreement between 51
States on reducing the environmental impact from air
pollution (the Gothenburg Protocol). Ship owners have
to pay a tax on each kilogram of NOX that is emitted, and
the money is placed in a fund. Ship owners can apply for
grants from the fund to invest in abatement technology
for their ships. Although the tax only applies to routes
within Norwegian waters, the system has been a success
in terms of investment in new technology. Different kinds
of technology are supported, such as LNG engines or
INFRASTRUCTURE SERVICES UNIT
Natural Resources and Infrastructure Division, UNECLAC
selective catalytic reduction (SCR) after-treatment. The
success of the Norwegian NOX fund system demonstrates
that there is great potential for including domestic
shipping in emission reduction schemes in response to
international agreements. Domestic shipping is seldom
a large contributor to pollution, but the increased use
of abatement technologies can be expected to result
in more mature technologies that will subsequently be
more easily adopted in larger segments of the fleet.
Another example is the environmentally differentiated
fairway due that has been used in Sweden for the
past two decades, which was originally combined
with financial support for investment in abatement
technologies. Although this also has the drawback of
only being applied in Swedish waters, it has encouraged
the use of SCR and other measures in a fair number
of ships.
A number of systems are already in place that involve
environmentally differentiated port fees and procurement
initiatives aiming at reducing emissions. However, the
actual impact on emissions is unclear. The stimulus needs
to be large enough to outweigh the costs of abatement
systems, and overcome the institutional barriers discussed
above. Thus, as a consequence, transport service buyers
must be prepared to pay more in order to reduce the
environmental impact of their transportations.
Including emissions from ships in mandatory or voluntary
schemes in ports can also be a way of complying with
national and local air quality standards in port cities. Many
cities have great difficulty in keeping concentrations
below ceiling levels, typically of PM, ozone and NOX.
Annual concentrations of PM10 in several South American
urban areas exceed national standards, in addition to
those established in the global air quality guidelines
recommended by the World Health Organization (Pan
American Health Organization, 2007). Also, despite
sometimes limited reporting, ozone and NOX can be
concluded to exceed air quality standards in many Latin
American cities (Maggiora and Lpes-Silva, 2006). NOX is
a precursor to ozone and smog incidents; NOX in sunny
environments will cause ozone formation in reactions
involving hydrocarbon species. Initiatives that reduce
NOX emissions from ships auxiliary engines running at
berth, through the installation of shoreside electricity and
exhaust treatment, could thus be a valuable step towards
improving air quality.
All in all, complementary efforts are required in addition
to the existing regulations on emissions to air from ships
in order to achieve significant absolute reductions. The
expected rise in transport demand will likely increase
shippings contribution to air pollution and global
warming, while regulations governing land transportation
continue to efficiently reduce land-based emissions.
Voluntary incentive systems for ship operators have
sometimes proven highly successful. Such efforts have
mainly occurred at the national level and have been very
different in nature. As demonstrated in this study, shipping
is a fuel-efficient means of transport. The potential for
shipping to provide both fuel-efficient and low-polluting
transport, however, depends on more widespread use of
existing abatement techniques. Furthermore, although
the fuel efficiency of shipping is already high, there is
still room for improvement, which will be a competitive
advantage in a future with expected high fuel prices.
Measures to improve fuel efficiency have been identified
in a variety of fields, from pure technical measures to
measures aiming at changing incentive structures within
the business. If they fulfil their potential, ships will offer
highly competitive transportation that is compatible with
a sustainable development.
VIII. Conclusions
Initiatives and incentives to improve energy efficiency
in the shipping sector are few and far between in the
region and Latin America and the Caribbean lags behind
other regions. No SECAs have been implemented in Latin
America and the Caribbean despite significant ship traffic
through vulnerable areas such as the Caribbean and
coastal zones. Furthermore, no measures have been taken
to promote a modal shift from road to sea at the national
and subregional level (Brooks, Snchez and Wilmsmeier,
2013). Thus the potential for greater energy efficiency,
particularly in long-distance transport, is not converted into
savings and better performance. The various possibilities
for energy efficiency covered in this bulletin illustrate how
countries in the region could move towards greater energy
efficiency in shipping and also how they could improve the
efficiency of the transport system overall.
9
 w w w. c e p a l . o r g / t r a n s p o r t e
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